Under the current law, the insurance company has to pay a “reasonable” attorney fee to the attorney representing an injured worker only when it is determined that the insurance company wrongfully withheld benefits and the workers attorney was successful in obtaining those benefits. 

The new law applies only to fees paid to the injured workers attorney and does not in any way limit the fees that can be charged or collected by the insurance companys’ attorneys.  The cap placed upon fees the insurance company may have to pay to the injured workers attorney for wrongfully withholding benefits is limited to 20% of the first $5,000 in benefits, 15% of the next $5,000 in benefits and 10% of the remaining benefits obtained (if the benefits are payable for more than 10 years then the fee is reduced to 5% of benefits beyond 10 years).  Because of the procedural requirements of Florida’ Workers Compensation Law, the average claim takes a competent attorney 40-50 hours to complete.

As an example of how the new law would apply, if the injured worker was denied advised by his or her doctor to remain out of work for 4 weeks, but the insurance company decided not to pay the wage loss type benefits (referred to as temporary total disability benefits) then the worker would need to hire an attorney to help him/her get these benefits.  If the weekly amount that the worker should have received was $500 then the total due is $2,000 ($500 x 4 weeks).  Applying the fee schedule above to the benefits that are due will result in a fee of $400 paid to the workers attorney for 40-50 hours of work.  That comes out to $10 or less per hour.

Business and insurance interests in Florida loudly applauded Governor Crist’ decision to remove the word “reasonable” from the law for two reasons.   First, by preventing the injured workers attorney from collecting a reasonable fee in many cases, the injured worker may not be able to find legal representation to fight back when the insurance company denies benefits.  Second, the insurance company knows that even if the worker can find an attorney who wins the case, the fee they will have to pay that attorney will often be insignificant. 

Proponents of the law claim it will save money and keep rates low.  However, most experts agree that the new law will encourage insurance companies to deny more legitimate claims.

Although a worker is still entitled to medical care and treatment when injured on the job, the compensation or money benefits for lost wages and impairment are no longer available if the worker does not report his or her income to the IRS.

Ordinarily an injured worker may receive money when he or she is prevented from working due to a job related injury.  The amount a worker gets depends upon the “wages” he or she earned during the 13 weeks before the accident.  In the Fast Track Framing case, the court said that Florida law defines the term “wages” to mean only “wages earned and reported for federal income tax purposes on the job where the employee is injured”.  Therefore if no earnings were reported by the injured worker during the 13 weeks before the accident then there are no “wages” to be used to calculate money benefits that would normally be due to the injured worker.

I some cases the benefits lost by these workers maybe a few hundred or few thousand dollars, but in others, where the injury may be catastrophic and lead to total disability or death, the benefits lost could be in the hundreds of thousands.

Attorneys who represent injured workers argue that such a harsh result unfairly penalizes the injured worker especially when there is ample proof of the amounts paid by the employer and received by the employee as compensation for work performed.  Arguably, this law promotes employer misconduct as it provides a financial incentive for an employer to hire illegal workers or to pay workers “off of the books” so that they probably won’t report that income and be eligible for benefits when injured on the job.

During the Jeb Bush years, Florida’ Workers Compensation Laws were rewritten giving employers and insurance companies greater control over the injured workers access to medical care and further limiting the benefits that workers could qualify for.  Additionally, the legislature made changes to the law which were designed to discourage attorneys from accepting representation of injured workers.  Since October 1, 2003, when that law went into effect, many injured workers were unable to find attorneys to help them get workers compensation benefits when the insurance company chose to deny the claim.  Jeb Bush and the Republican led legislature placed no restrictions upon the employer or their insurance company’ ability to hire legal counsel to defend claims.

Recently, however, the Florida Supreme Court ruled that an attorney who successfully represented an injured worker against an employer or insurance company who wrongfully withheld workers compensation benefits may receive a reasonable fee for the work performed.  This ruling immediately prompted Anitere Flores, a Republican member of the House of Representatives for District 114 in Miami, to sponsor HB 903 which seeks to reverse the Supreme Court’s ruling.

The Bill sponsored by Dan Gelber would allow injured workers the ability to hire  knowledgeable attorneys to help them get the benefits they need and are legally entitled to.  Additionally, Gelber’ Bill also gives injured workers some limited additional compensation benefits while they receive vocational training.  The additional benefits allow a worker, who is unable to continue in his or her usual occupation because of the work accident, to receive some financial assistance to help pay for their living expenses while receiving education and retraining that will assist them in returning to the work force.

The lobbyists for big business and insurance companies are quick to argue that the restrictions they want to impose upon the workers rights to hire legal help are necessary to keep down costs.  In reality, however, the law only requires the employer or insurance company to pay for the worker’ attorney fees when the benefits were wrongfully withheld.

The Bill sponsored by Flores seeks to cap attorney fees to a scheduled amount that in many cases would result in a fee too small to compensate the attorney for the time and expense necessary to get the workers compensation benefit.  If the bill succeeds and eventually becomes law the result will be devastating to many injured workers in Florida who will be left with no ability to obtain workers compensation benefits which have been wrongfully denied. 

To understand how HB 903 could prevent injured workers from receiving benefits they may be entitled, to one must first understand the legal process that the worker is required to follow when benefits are denied.   

The rules for obtaining Florida Workers Compensation benefits wrongfully withheld by the employer or their insurance carrier are complex and time consuming.  First, a Petition For Benefits must be properly filed and must meet all of the legal requirements outlined in the Florida Statutes.  Next, discovery must take place meaning that both sides will obtain documents and take depositions of witnesses to determine if the benefits are actually due.  In almost every case the employer (if self insured) or their insurance company will hire an attorney who will quickly schedule the deposition of the injured worker to question him or her about their background, education, prior work experiences, prior injuries and medical conditions, the facts and circumstances of the present work accident, accident related injuries, medical treatments, etc.

If the benefits are being denied because the employer or their insurance company does not believe that an accident occurred, then witnesses will have to be located and questioned under oath to verify the accident.  Sometimes the denial is based upon the insurance companys’ belief that the injuries complained about by the worker are not really caused by the accident (or working conditions) on the job.  If that is the case, then medical experts must be hired to examine the worker and testify in person or by deposition regarding their opinions.  Cases that involve complex medical issues may require research into Occupational Medicine and Epidemiology studies which can be expensive and extremely time consuming.

One of the most important factors which will determine how much time and effort is necessary to proceed with a claim for benefits is the employer or insurance companys’ commitment to defending against it.  If the insurance company decides to fight the claim and instructs their attorneys to vigorously defend, then the insurance companys’ attorneys will examine every aspect of the workers life and prior medical history in great detail.  This means that both sides will have to obtain and review more medical records and attend more depositions which greatly increases the time and effort required by the workers’ attorney too.  The gathering of information by taking depositions, subpoenaing medical records, obtaining documents from each party, etc. is called discovery.  In addition to taking discovery, Florida law requires that the parties try to settle their issues by the process of Mediation before trial. 

The Mediation process requires the worker and his attorney to appear in person at the State Workers Compensation office and be thoroughly prepared to negotiate and resolve the issues if possible.  If the parties cannot reach an agreement to resolve the issues, then the Court will schedule a Pre-Trial and Final Hearing or Trial date.  The process of preparing for a Pre-Trial requires each side to carefully review all of the medical records, medical issues, claims and defenses, factual, legal and procedural issues and prepare a document for the court that will serve as an outline for the Trial.  The document is several pages long and describes among other things, the claims, defenses, jurisdiction over the parties and subject matter, agreements of the parties, a list of witnesses and exhibits to be offered at trial.  A case may be won or lost based upon the preparation of this Pre-Trial document (called a Pre-Trial Stipulation) so both sides must spend time to prepare it correctly and in accordance with the law.

If the employer or the insurance company insist upon going to trial then an additional document called a Trial Summary must be prepared and submitted to the Court at least two full business days prior to the final hearing.  The Trial Summary is a memorandum consisting of a statement of relevant facts and written arguments.  At trial each side must present their case in accordance with the rules of evidence under Florida Law.  If all of this sounds confusing and very time consuming that’s because it is (not to mention costly).  It is virtually impossible for the injured worker to represent themselves in a competent fashion.  To make matters worse, the insurance company can afford to hire the best defense attorney to represent them as there is no limitation on the amount the employer or their insurance company can spend to fight a claim made by an injured worker.  Even a case where the facts are relatively simple and straightforward may take an experienced attorney at least 40 hours to prosecute.

The legal cap on attorney fees being sought by R. Flores in HB 903 would limit only attorney fees payable for representing the injured worker to the following schedule: 20 percent of the first $5,000 of the amount of the benefits secured, 15 percent of the next $5,000 of the amount of the benefits secured, 10 percent of the remaining amount of the benefits secured to be provided during the first 10 years after the date the claim is filed, and 5 percent of the benefits secured after 10 years.  Again, there is no limit on what the attorneys who represent the insurance company can charge for their services.

While this schedule may be adequate when the benefits fought over are valued in the tens or hundreds of thousands of dollars, what happens to the case where the injured worker is instructed to remain out of work by the doctor he is sent to by the insurance company and yet the insurance company is not sending him any compensation benefits to pay for his lost wages.  If that worker was entitled to $400 dollars a week and was out of work for 3 months he lost $4,800 dollars in benefits.  An Attorney who agrees to try to get that benefit for the injured worker will likely spend at least 40-60 hours (and $750-$1,500 in costs advanced by the attorney) working on the case.  And that assumes that the case is limited in scope to one or two simple legal or factual issues that must be decided by the Judge at trial.  If the attorney for the injured worker wins the case his fee pursuant to the above schedule will be $960 for 40-60 hours of work or $16-$24 per hour (if the case is lost the attorney recovers nothing for his time and usually his costs as well).  Even the cost of operating the attorney’s law office is more than double the hourly rate he or she would receive for winning this case.  Experts agree that the passage of HB 903 or any bill similar to it will only encourage insurance companies to take advantage of the injured worker by denying legitimate claims knowing that the likelihood of litigation is reduced significantly and, in addition, if litigation does result and they lose, the fees they are responsible to pay are minimal.

On the other hand, the insurance industry argues that allowing the injured worker’ attorney to recover reasonable fees will increase the cost of providing workers compensation insurance coverage and will harm businesses.  Again, experts disagree on this point as the law only allows the worker’ attorney to recover a fee against the insurance company if the attorney wins the case and proves that the benefits claimed were wrongfully withheld.  Simply put, don’t withhold the benefits due to the injured worker and no fee will be due at all.

NCCI previously requested an 8.9 percent rate increase as a result of the impact on rates it projects following the Oct. 23 Florida Supreme Court opinion in the case of Emma Murray v. Mariner Health Inc. In that case the Court ruled that attorneys representing injured workers were allowed to recover reasonable fees for helping workers to obtain statutory benefits where the insurance company or the employer refused to provide them voluntarily.  Before this ruling, the lower Courts were misinterpreting the law and capping attorney fees to a small percentage of the benefits obtained.  In some cases the hourly rate that an attorney representing an injured worker would be bound to take would be less than minimum wage.  Before the Emma Murray decision by the Supreme Court on October 23, 2008, many injured workers were left without the ability to retain an attorney to help them get benefits that the insurance company chose to deny.  The attorney fee limitations in Florida’s Workers Compensation Law only apply to attorneys representing injured workers and not to the insurance companies.  Insurance companies are free to spend whatever they wish to defend against claims brought by injured workers.
 
“Although it is still somewhat early to know for sure what the full impact of the Supreme Court’s decision on workers’ compensation rates will be, I felt it was necessary to approve this modest increase,” said Commissioner McCarty. “I hope that the legal and business communities will be able to come to an agreement on a plan for legislation that will maintain appropriate access to the legal system for injured workers while also still keeping workers’ compensation rates affordable for employers.”

The approved rate increase will add about $172 million in insurance costs for Florida employers. But, in combination with the 18.6 percent rate decrease that took effect Jan. 1, the net savings to Florida employers is still $438 million.

In its Nov. 14 filing, the NCCI had proposed spreading an 18.6 percent rate increase over two years – 8.9 percent for the first year, to become effective March 1 – for the voluntary market for all new and renewal workers’ compensation insurance policies written in Florida.

In October, Commissioner McCarty approved an 18.6 percent reduction in rates, effective Jan. 1. It was the sixth consecutive drop in worker’s compensation rates since the Florida Legislature passed the reforms in 2003; and with the change, the cumulative overall statewide average rate decrease since 2003 is more than 60 percent. The NCCI originally had requested a 14.1 percent decrease in its filing of Aug. 27. The further reduction in rates had the potential to save Florida employers more than $610 million.

The 18.6 percent decrease in October stands as the largest one-year decrease on record, following the two previous largest decreases – 18.4 percent for 2008 and 15.7 percent for 2007. The last six filings represent the largest consecutive cumulative decrease on record in Florida workers’ compensation rates – dating back to 1965.

Much of the savings in the cost of providing Workers Compensation benefits have arguably come as a direct result of reducing benefits to injured workers and providing insurance companies with greater control over claims.